All Entity Types
Choose the right business structure for your needs
Partnership
An association of two or more partners combining resources to run a Canadian business.
Partnership
A formal agreement between two or more co-owners to run a business together.
Persona Física con Actividad Empresarial
The Mexican equivalent of an individual registered sole trader or business person.
PLLC
Specialized LLC for licensed professionals with personal liability protection.
Professional LLC
Specialized LLC structure for licensed professionals such as doctors, lawyers, and accountants.
S Corporation
Tax election allowing pass-through taxation with potential savings on self-employment taxes.
Sociedad Anónima de Capital Variable
The standard and highly versatile joint-stock corporation in Mexico with variable capital options.
Sociedad Anónima Promotora de Inversión
A modern corporate vehicle in Mexico designed specifically to attract venture capital and private equity.
Sociedad Civil
A civil partnership designed strictly for non-commercial professional services in Mexico.
Sociedad de Responsabilidad Limitada
The Mexican equivalent of an LLC, prioritizing close partnership control and liability shield.
Sole Proprietorship
The simplest, lowest-cost way to operate a business alone in Canada.
Sole Proprietorship
The simplest unincorporated business model owned and run by one individual.
Side-by-Side Comparison
Quick overview of key differences between entity structures
| Structure | Liability | Taxation | Complexity | Ownership | Best For |
|---|---|---|---|---|---|
| Business Corporation | Full | Pass-through (S Corp election) | Moderate | Shareholders (max 100, US only) | Established businesses wanting tax savings |
| C Corporation | Robust Corporate Veil Protection | Double Taxation (Corporate Rate + Shareholder Dividend Tax) | High | Shareholders, Board of Directors, and Officers | Venture-Backed Startups |
| C Corporation | Full | Double (Corporate + Personal) | Complex | Shareholders (unlimited) | Venture capital-funded startups & large enterprises |
| Corporation | Full Corporate Shield Protection | Corporate Tax System (Federal + Provincial Rates) | Medium to High | Shareholders and Board of Directors (Min 25% Canadian resident directors required federally) | Canadian Growth Businesses & Startups |
| DBA | None (depends on entity) | Same as underlying entity | Minimal | Same as underlying entity | Businesses wanting multiple brand identities |
| Extra-Provincial Registration | Maintains Active Corporate Shield | Multi-Provincial Apportioned Corporate Tax | Medium | Governed by the parent corporate structure | Interprovincial Canadian Businesses |
| Foreign Qualification | Maintains Domestic Liability Protections | Dual-State / Multi-State Apportioned Taxation | Medium | Inherited from parent domestic business structure | Expanding Multi-State Companies |
| Limited Liability Company | Complete Personal Shield Protection | Flexible (Pass-Through or Corporate Election) | Low to Medium | Members (owners), flexible management structure | Small Businesses & Startups |
| LLC | Limited | Pass-through | Simple | Members (unlimited) | Small business owners seeking liability protection |
| LLP | Partial (partner-to-partner) | Pass-through | Moderate | Partners | Professional service firms |
| LP | Limited (for limited partners only) | Pass-through | Moderate | General + Limited Partners | Real estate & investment funds |
| Nonprofit | Limited (for directors) | Tax-exempt (501c3) | Complex | No owners — board governed | Charitable & mission-driven organizations |
| Partnership | Joint and Several Personal Liability | Pass-Through Joint Taxation | Low to Medium | Two or more general partners (or combination with limited partners) | Collaborative Canadian Co-Founders |
| Partnership | Limited to No Protection for General Partners | Pass-Through (Shared Business Tax) | Low to Medium | Two or more general or limited partners | Professional Service Co-Founders |
| Persona Física con Actividad Empresarial | Zero Asset Protection | Individual Progressive Income Tax | Low | Sole individual owner (RFC holder) | Mexican Solopreneurs |
| PLLC | Limited (varies by state) | Pass-through | Moderate | Licensed professionals only | Doctors, lawyers, accountants & architects |
| Professional LLC | Targeted Professional Liability Protection | Flexible (Pass-Through or Corporate Election) | Medium to High | Licensed professionals within the same industry | State-Licensed Professionals |
| S Corporation | Standard Corporate Shield Safeguards | Pass-Through (With Payroll Optimization Options) | Medium to High | Shareholders (Max 100, US citizens/residents only) | Profitable Small Businesses |
| Sociedad Anónima de Capital Variable | Full Corporate Veil Protection | Mexican Federal Corporate Tax (ISR) | High | Minimum of 2 shareholders; Managed by a Sole Administrator or Board of Directors | Standard Mexican Commercial Corporations |
| Sociedad Anónima Promotora de Inversión | Premier Corporate Shield | Corporate Tax with Investment Structuring Support | Very High | Highly flexible board management; customized voting and dividend classes | Investment-Ready Mexican Startups |
| Sociedad Civil | Partial Liability Protection for Partners | Cash-Basis Corporate Taxation | Medium | Two or more licensed partners (SOCIOS) | Mexican Professional Practices |
| Sociedad de Responsabilidad Limitada | Limited Partner Liability Shield | Mexican Corporate Tax (ISR) | Medium to High | Minimum of 2, maximum of 50 partners | Closely-Held Mexican Businesses |
| Sole Proprietorship | Unshielded Liability | Personal Income Tax Integration | Very Low | One individual | Canadian Solopreneurs & Freelancers |
| Sole Proprietorship | No Protection (Unlimited Liability) | Direct Personal Pass-Through | Very Low | Single individual owner | Freelancers & Solo Contractors |
| Sole Proprietorship | None | Personal (Schedule C) | Minimal | Single owner | Freelancers, consultants & sole traders |
| Unlimited Liability Corporation | No Liability Shield (Unlimited Shareholder Exposure) | Hybrid (Corporate locally, Pass-Through internationally) | High | Shareholders (Domestic or International) | US-Canada Cross-Border Enterprises |
How to Choose the Right Entity Type
Consider these factors when deciding which business structure fits your needs
Liability Protection
Determine how much personal asset protection you need. LLCs and Corporations offer strong liability shields, while Sole Props offer none.
Tax Implications
Pass-through entities like LLCs and S Corps avoid double taxation, while C Corps pay corporate taxes. Consider your profit expectations.
Growth & Funding
If you plan to raise venture capital or go public, a C Corporation is typically required. LLCs work best for bootstrapped or lifestyle businesses.
Administrative Burden
Consider ongoing compliance costs. LLCs have fewer requirements than Corporations, but both need annual reports, agent services, and record-keeping.
Frequently Asked Questions
Common questions about business entity types
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